Argo Blockchain shares soar after selling Texas mining facility to Galaxy Digital
- December 29, 2022
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London-based Bitcoin miner Argo Blockchain PLC’s stock price spiked by more than 100% during U.K. trading hours on Wednesday and closed up 73.33% on the London Stock Exchange after the company announced it would sell its Texas-based Helios facility to Galaxy Digital Holdings Ltd, a financial services and investment management firm led by billionaire investor Mike Novogratz.
See related article: Bitcoin hashrate drops nearly 40% as deadly U.S. storm unplugs miners
The deal, worth US$65 million, does not include Argo’s cryptocurrency machines which the company will continue to operate at Helios, it said.
About 24,000 of the mining machines will act as collateral on a US$35 million loan from Galaxy to Argo as part of the deal.
The funds secured by the sale and loan will help Argo avoid bankruptcy and to pay down around US$85 million in debt and fees on its balance, the company said.
The Bitcoin miner believes that the deal will reduce the company’s net debt by around US$41 million. While the sale boosted Argo’s stock on Wednesday, it is down by more than 90% in the past year.
On Tuesday, Argo requested a suspension of trading on its Nasdaq-listed shares.
The crypto mining industry has been hit hard this year amid rising energy costs and falling Bitcoin prices.
Bitcoin mining hashrate, the level of computing power used for mining and processing transactions, dropped nearly 40% earlier this week due to deadly blizzard conditions in the U.S. that have forced miners to shut down their facilities.
Last week British Columbia, Canada, suspended new electricity connections for crypto miners, and one of the largest publicly traded crypto mining firms, Core Scientific, filed for bankruptcy.
See related article: Bankrupt miner Core Scientific may sell facilities under development: report